Open-internet rules fight seen raging beyond FCC rollback

Wednesday

Nov 22, 2017 at 8:00 AM

Todd Shields | Bloomberg

Federal Communications Commission Chairman Ajit Pai took a big step toward his goal of voiding Obama-era net neutrality regulations Tuesday as he submitted his plan to the rest of the commission for a vote.

But the expected adoption of the plan by his fellow Republicans on the commission next month won't end a debate that's roiled the tech world for years. Aggrieved parties will try to save the regulations in federal court, where judges will decide whether the agency is within its rights to reverse a regulation it adopted little more than two years ago.

"There will be lawsuits -- that's a given," said James Gattuso, a senior research fellow at the Heritage Foundation in Washington.

The planned vote on Dec. 14 will reignite a debate that's extended for more than a decade as Washington grapples with how the internet has disrupted the phone and cable businesses.

Republicans and Internet service providers have fought the FCC's rules, while Democrats and internet companies support them. The regulations bar broadband companies such as AT&T and Comcast from interfering with web traffic sent by Google, Facebook and others.

A court last year upheld the FCC's 2015 decision to place broadband service providers under utility-style regulation. The FCC used that strong legal authority to bar the companies from slowing or blocking web traffic or charging for faster passage across their networks. Two earlier attempts to regulate web traffic were tossed by U.S. judges.

"Our current net neutrality rules are the product of a decade's worth of work and three trips to the court. They are court-tested and wildly popular," FCC Commissioner Jessica Rosenworcel, part of the agency's Democratic minority, said in an email before the proposal was announced. "To wipe them out now is foolhardy and short-sighted."

Pai sought to vacate the rules adopted in 2015, retaining only a portion that requires broadband providers to explain details of the service they are offering. Under the plan, the Federal Trade Commission would be able to police internet service providers to protect consumers, he said.

"Working with my colleagues, I look forward to returning to the light-touch, market-based framework that unleashed the digital revolution and benefited consumers here and around the world," Pai said in a statement.

The move hands a victory to such companies as AT&T and Comcast, which opposed the regulations from the start, arguing the rules discourage investment while exposing companies to a threat of heavier regulation including pricing mandates.

Legally, the agency can reverse its rules if it has a good reason.

"You can change your mind so long as you justify it and explain why the policy has changed," said Christopher Yoo, a law professor at the University of Pennsylvania.

Broadband providers have said they support an open internet, and emphasized their opposition to the 2015 rules' reliance on strong authority that leaves the companies under utility-style common carrier regulations. They say the rules give the FCC too much sway over their operations.

One aspect of the rules that may come before a court is whether they have dampened investment by broadband providers.

"If the court's looking for something empirical that has changed, that may be the twig they hold onto," said Gattuso, of the Heritage Foundation.

Pai, appointed chairman by President Donald Trump, has shared broadband providers' criticism of the agency's claim of utility-style authority, and said the rules led to a decline in investment by broadband companies.

"The more heavily you regulate something, the less of it you're likely to get," Pai said in an April speech. He said broadband investment declined by 5.6 percent, or $3.6 billion, between 2014 and 2016, and called the decline "extremely unusual."

AT&T Chief Executive Officer Randall Stephenson in a January earnings call sounded a similar note, saying that "placing utility style regulation on our mobility and internet businesses, there is no way anybody could argue that that is not suppressive to investment."

Rule supporters have pushed back. Wireless industry investments peaked in 2013, as carriers completed the bulk of deployments for the current generation of mobile connections known as 4G, according to the policy group Free Press, which supports the Obama-era rules.

Gigi Sohn, who helped write the current rules as an FCC aide, said the case will turn on whether consumers view their broadband internet access as some type of bundled service, replete with email and spam filters, or as "as a big dumb pipe."

If it's a dumb pipe, internet access is clearly a telecommunications service and the 2015 rules should stand, said Sohn.

Pai "is going to have to show that two-and-a-half years later people changed their mind, and that now they want want more -- that they're looking for some bundle of services," Sohn said in an interview. "That's going to be tough for him to show."

"The big broadband providers will be free to double their prices," she said in an emailed statement. With the change, they will be able to "extract extra tolls on fast lanes for online businesses."

Tina Pelkey, an FCC spokeswoman, declined to comment.

The current regulations forbid broadband providers from blocking or slowing web traffic, or from charging higher fees in return for quicker passage over their networks.

Trump's White House has opposed the rules. In July, as Pai's critics protested, a White House spokesman said the administration "supports the FCC's efforts to roll back burdensome, monopoly-era regulations."

Never miss a story

Choose the plan that's right for you.
Digital access or digital and print delivery.